Does it make a difference who is the mortgage borrower and co-borrower in this scenario?
I assumed a mortgage loan with a balance of $ 220K almost 12 months ago from my Dad and Mom. Since they bought the house in 1997, they have been paying the monthly mortgage of which is now $ 1800, until now. They wanted me to assume the loan so I can take advantage of the tax break. I do not live with them and a quitclaim deed has been recorded. The outstanding mortgage loan only appears in my credit record, but not my wife. We basically have the same credit score of close to 800. We now want to buy our own house. Will it make a difference if my wife is the borrower and I am a co-borrower since I have this mortgage on my credit record? Will it help with us keeping our debt-to-income ratio low, regardless of the fact that I do not pay the monthly mortgage of $ 1800? We are here in California, if it makes any difference at all.
Any response will be appreciated.
Kemperk-I spoke with the loan consultant and was told to provide a copy of cancelled checks for the last 12 months to show that it is my Dad who is actually paying the monthly mortgage. I also thought about your suggestion of having another person assume the existing loan so I can get it out of my credit record. In addition, I may just end up adding another co-borrower for the new loan besides me and my wife.